The independent GAAR Advisory Panel was set up in 2013 to provide guidance and non-binding opinions on cases where HMRC considers that the General Anti-Abuse Rules (GAAR) may apply. The GAAR seeks to counteract the tax advantages arising from abusive tax arrangements but, crucially, cannot be invoked by HMRC without a favourable ruling from the Panel.
On 3 August 2017, the Panel published its first opinion on a tax planning scheme. The scheme involved an employer buying gold bullion for two key employees, and was found to be structured in a way that exploited a shortfall in the legislation relating to disguised remuneration schemes. The legislation has since been amended, however as this scheme was implemented prior to the change in legislation, HMRC sought to rely on the GAAR to counteract the arrangement.
The Panel concluded that the arrangement was an 'abusive tax arrangement' within the meaning of the GAAR. They considered it 'inconceivable' that parliament would have anticipated the legislation would result in the tax treatment achieved by the arrangement in question.
Whilst this scheme was so contrived that the outcome is unsurprising, the Panel's approach is similar to the purposive approach that we have seen adopted by the courts in other recent cases. It will be interesting to see what may be considered acceptable tax planning by the Panel as more Panel opinions are published and in what circumstances the Panel may side with the taxpayer.